In June this year the National Housing Federation (NHF) warned Grant Schapps, the housing minister, that housebuilding would 'fall off a cliff' this year due to cuts. They further warned that new affordable home construction would fall by 65%.They put the figure of new homes that would end up being built at about 20,000.
Now according to the Markit/CPS UK Manufacturing PMI shows a distinct lack of confidence in the UK residential property construction industry. When the index is over 50 it is considered positive and the higher the better. Reported by homemove.co.uk (homemove.co.uk/news/05-10-2010/housebuilding-slumps-in-september.html) the september index was put at 45.4.
This contrasts with the overall construction PMI which rose in September to 53.8 from 52.1. As pointed out in London South East (http://www.lse.co.uk/FinanceNews.asp?ArticleCode=y40c6yz3j97djtf&ArticleHeadline=UPDATE_1UK_construction_PMI_up_in_Sept_but_outlook_weak), this seemed to be more about commercial and civil engineering confidence. But it is the future after the cuts that has everyone worried.
It is thought that the austerity measures will hit the whole construction industry particularly hard. Many expect to see construction projects shelved if not cancelled as the government struggles to bite into the deficit.
David Noble, chief executive of the Chartered Institute of Purchasing & Supply said 'Whilst the construction sector is still growing, a sharp fall in confidence suggests work in the pipeline may not be so strong. Not since the onset of the recession have we seen optimism in such short supply.'
But there is some good news about. The go ahead for plans to build Britain's largest development of 'zero carbon' homes (http://www.build.co.uk/construction_news.asp?newsid=117370) has been given after funding was agreed.
It is hoped that the development in Peterborough will regenerate the south bank of the city's River Nene.
344 environmentally friendly homes will be built to house 475 people. It will also though include 'open spaces, a sustainable urban drainage system (SUDS), carbon zero energy generation and retail and community facilities'.
But one has to ask where is the money to come from for future such projects around the country and, if built, who can afford to buy them?